I believe PXUPA June distribution will be paid. With the payment...

I believe PXUPA June distribution will be paid. With the payment of last (Dec-10) distribution the company has just come out of the 'two consecutive distributions' embargo hoping to resume payment of dividend on ord shares in the not too-distant future as the long-standing institution shareholders have been expecting them to do. The start of ordinary shares dividend would now have to be delayed (to (FY12..?). But there is no reason to risk credibility by not paying around $11m or so required in forthcoming PXUPA distribution as, unlike the last time, they are not currently under any bank covenant that prevents them to hold back payment, nor is the company under financial distress.

Clearly, the european paper market (PPX's biggest revenue generator) is not picking up yet as expected, and the savings the company has engineered to date have not yet filtered through to the bottom this FY because of the time lag. FY12 should show the turnaround, with paper markets hopefully starting to pick up, and planned savings already in the pipeline flowing through, as well as additional savings initiated from now on because of the current tight situation.

I won't be surprised if PPX sp now (at around 20c) is a major bottom, with considerable upside continuing over the next few years. With revenue of around $4b (somewhat lower in FY11??), the company needs to make only around $12m net profit to justify the current sp (at P/E of 10). I am sure it can do much better next year and beyond!

Both PXUPA and PPX should be good punts at current prices!!